Does democracy foster increased state capacity? An answer to this question has crucial implications for many countries that have democratized during the Third Wave of Democratization but demonstrate serious shortcomings in terms of state capacity. In this paper, I critically examine existing theoretical work on the topic, in particular the notion of J-shaped relationship, and subsequently develop three causal pathways through which democracy might enhance the administrative capacity of the state. Two hypotheses are derived expecting a) that a country’s level of democracy affects its administrative capacity, and b) that the duration of the democratic regime affects its administrative capacity. The hypotheses are subjected to empirical assessment trough a statistical, time-series cross-sectional analysis of 122 countries during the third wave. For this purpose, I use V-Dem data1 which is arguably better suited for the empirical assessment compared to existing indicators. The results from the empirical evaluation suggest that the contemporary level of democracy has no robust impact whereas the extent of experience with democracy appears to have a positive and substantively interesting effect. I conclude that democracy does advance state administrative capacity, but only when considered as a cumulative, historical phenomenon.

This paper presents a very sophisticated and impressive account of the theories in the body of work engaging with the relationship between democratization and state capacity. Deriving two hypotheses from this literature, and subjecting them to a very competent empirical analysis using V-Dem data on 122 countries in the third wave of democratization, in a time-series, cross-sectional regression framework, provides an elegant and notable design. The results demonstrate in a convincing way – and contrary to most existing findings – that regime status has no effect on changes in levels of state capacity. Yet, the author also shows that an accumulation of years with democracy increases state capacity significantly. This is an important insight: It tells us that states with low state capacity can develop democracy first and that democracy can function to strengthen state capacity if given enough time. If these results will stand up to further testing, they provide an very important contribution.

This paper estimates how levels and changes of democracy affect economic outcomes around economic crises, using yearly data from the Varieties of Democracy project. I observe the different impacts on factors like the debt-to-GDP ratio, GDP growth, and the exchange rate to the US dollar. While my model finds statistically significant results for many of these factors, the overall impact of democracy is found to be small and appears to be specific to certain regions or specific economic crises rather than having a generalizable trend. I also discuss possible limitations to my findings.

This paper provides an good understanding of where the literature stands on the relationship between democracy and outcomes of economic crisis. With an original design spanning 1972 to 2007 thus covering both crisis-periods in Latin American and in Asia, and with multiple split-sample analyses, the author finds no systematic evidence that democracy provides for better economic outcomes during economic crises. At the same time, there is no evidence that democracies are doing worse than other political regimes either. This is an important finding as such but also encourages us to recognize that other factors than regime characteristics are more important to explain the outcomes of economic crises, and start searching for those.